Opinion
CLAIM NO. E513736
OPINION FILED SEPTEMBER 20, 1999
Upon review before the FULL COMMISSION, Little Rock, Pulaski County, Arkansas.
Claimant represented by DAVID H. McCORMICK, Attorney at Law, Russellville, Arkansas.
Respondent represented by THOMAS J. DIAZ, Attorney at Law, Little Rock, Arkansas.
Decision of Administrative Law Judge: Reversed
OPINION AND ORDER
[2] This claim raises an issue of first impression with regard to the interpretation of attorney's fees allowed in Ark. Code Ann. § 11-9-107. Respondent appeals from a decision of the Administrative Law Judge filed October 29, 1998, finding that respondent failed to timely raise its entitlement to an attorney's fee and is, therefore, barred by the doctrines of waiver and res judicata from receiving one at this time. Based upon our de novo review of the entire record, we find that respondent acted in accordance with the statute with regard to its entitlement to an attorney's fee, and that the decision of the Administrative Law Judge must be reversed.The sole issue before the Commission at this time is whether respondent is entitled to an attorney's fee for prevailing on the retaliatory discharge issue raised by claimant at the initial hearing on November 22, 1996. There are sub-issues which concern respondents' entitlement to an attorney's fee, specifically whether an attorney's fee may be credited against future medical benefits and whether by crediting the attorney's fee against medical benefits, respondent controverted claimant's entitlement to such benefits.
Ark. Code Ann. § 11-9-107 provides for a penalty of up to a $10,000.00 fine for the willful discrimination against a claimant who files a claim for workers' compensation benefits. In this regard, Ark. Code Ann. § 11-9-107(b) provides:
(1) In addition, the prevailing party shall be entitled to recover costs and a reasonable attorney's fee payable from the fine.
(2) Provided, however, if the employee is the non-prevailing party, the attorney's fee and costs shall, at the election of the employer, be paid by the employee or deducted from future workers' compensation benefits.
As noted by the Administrative Law Judge, this provision fails to set forth the parameters within which the prevailing party may claim entitlement to an attorney's fee. The statute merely provides that the prevailing party is entitled to recover costs and a reasonable attorney's fee and if it is the employer, the employer may elect to have the employee pay the fee and cost, or may elect to deduct the fee and cost by claiming a credit against future workers' compensation benefits.
In the present claim, claimant did not prevail on her retaliatory discharge claim. Moreover, claimant did not prevail on her claim for additional temporary total disability benefits or the medical benefits requested during the initial hearing. On appeal, the Full Commission affirmed the decision of the Administrative Law Judge finding that claimant failed to prove entitlement to the additional temporary total disability benefits or the medical benefits requested. However, out of an abundance of caution, we found that since claimant did sustain a compensable injury, if claimant were to require additional medical treatment in the future, that she is entitled to all reasonable and necessary medical expenses related to her compensable injury. We did not, however, find that claimant had incurred reasonable and necessary medical expenses related to her compensable injury out of the evidence presented during the initial hearing.
At no time did respondent petition the Administrative Law Judge, or the Full Commission, for its attorney's fees for prevailing on the retaliatory discharge issue. However, there has been no procedure established requiring a prevailing party under this Section to petition for fees. Through a strict interpretation of Act 796, we cannot find that respondent has waived or is now barred by the doctrine of res judicata from asserting its rights to attorney's fees under this statute. Respondent did just what the statute said it may do. Respondent prevailed on the issue of retaliatory discharge. It elected to deduct its costs and reasonable attorney's fees from claimant's future workers' compensation benefits. Once claimant began receiving such benefits, respondent asserted its attorney's fee credit.
In reaching our finding, we find Marsh McLennan of Arkansas v. Herget, 321 Ark. 180, 900 S.W.2d 195(1995), persuasive. Although Herget does not address the Arkansas Workers' Compensation Act and, specifically, Ark. Code Ann. § 11-9-107, the reasoning and analysis of the opinion is controlling. The Court in Herget was presented with a statute that provided for attorney's fees and was asked to interpret how and more particularly when it may be asserted. This is precisely what we are addressing in the present claim. Ark. Code Ann. § 11-9-107(b)(1) states that the prevailing party shall be entitled to recover costs and attorney's fees. As with the statutory provision allowing for fees in the Herget case, Ark. Code Ann. § 11-9-107 does not explain how or when a claim for fees may be asserted. In our opinion, the analysis in Herget is at least persuasive, if not controlling. Accordingly, for those reasons expressed herein, we find that respondent is not barred from asserting a fee for prevailing on the willful discrimination claim.
Since we find that respondent did not waive its entitlement to attorney's fee, we further find that the decision of the Administrative Law Judge finding that respondent cannot assert its credit for attorney's fee against medical benefits must be reversed. The Administrative Law Judge reasoned:
The effect of this interpretation of the statute, as a practical matter, could be to impose the attorney's fee on the medical provider and might effectively end the claimant's access to the reasonably necessary medical care to which he is otherwise entitled.
Ark. Code Ann. § 11-9-107 does not limit the credit for attorney's fees to only indemnity benefits. This provision allows for a credit against "future workers' compensation benefits." As with third-party judgments or settlements in Ark. Code Ann. § 11-9-410, a credit against future benefits applies to all workers' compensation benefits. Medical benefits are not excluded from this credit. Ark. Code Ann. § 11-9-102(F) entitled Benefits identifies medical benefits as benefits pursuant to this chapter. Consequently, a strict interpretation of the Act (and even a liberal interpretation) would not exclude medical benefits from "future workers' compensation benefits" as identified in Ark. Code Ann. § 11-9-107 from which the respondents may claim a credit. Strictly construing the Act as we are mandated to do, "benefits" and "compensation" are not interchangeable, thus § 11-9-804 which uses the term "compensation" yet does not bar claims for future medical expenses is clearly distinguishable. The lump sum provision which excludes medical expenses from a lump sum pay-out of compensation clearly only intends to allow for a lump sum of future permanent disability benefits as these are the only benefits which may be calculated with any degree of certainty. Moreover, § 11-9-804 was not changed by Act 796 and, as such, prior interpretations of "compensation" under this provision are still controlling. See, Lawhorn Services v. Brown, 335 Ark. 272, ___ S.W.2d ___ (1998). However, Ark. Code Ann. § 11-9-107 was specifically created by Act 796 and must be strictly construed. Strictly construing the term "benefits" in this Section, medical benefits must be included. See, Ark. Code Ann. § 11-9-102(F). The legislature did not limit respondents' ability to assert a credit solely against indemnity benefits, as was their right to do so. Conceivably, as the Administrative Law Judge noted, a claimant may be unable to provide for the medical benefits sought if a credit is claimed against medical benefits; however, this consequence must be considered by a claimant prior to asserting a retaliatory discharge claim which cannot be proven.
Accordingly, for those reasons set forth herein, we find that the decision of the Administrative Law Judge denying respondent entitlement to attorney's fee for prevailing on retaliatory discharge claim must be reversed.
This claim is hereby remanded to the Administrative Law Judge to conduct any and all further proceedings necessary for a determination as to the amount of fees and costs to which respondent is entitled.
IT IS SO ORDERED.
_______________________________
CONCURRING OPINION
[17] I concur in the principal opinion's remand to the administrative law judge to conduct any and all further proceedings necessary for a determination as to the amount of fees and costs to which the respondents are entitled for prevailing in the claimant's prior claim for alleged discrimination pursuant to Ark. Code Ann. § 11-9-107. I write separately to express my thoughts as to why we are constrained to reach this result.There is no question that the claimant was the "non-prevailing" party in the first litigation before an administrative law judge on a claim for "willful discharge" under Section 107. Likewise, there is no question that the respondents did not seek or obtain from the first administrative law judge a specific determination of the respondents' attorney's fee and costs to be paid by the claimant or to be deducted from future workers' compensation benefits. There is also no dispute that neither party raised any Section 107 issues in the claimant's appeal to the Full Commission in the prior litigation. The respondents raised their entitlement to an attorney's fee for prevailing on the claimant's Section 107 claim only after the claimant sought additional medical treatment after the prior litigation.
In the present round of litigation, the claimant seeks to hold the respondents liable for her additional medical expenses, and the respondents deny liability solely on the basis that the respondents seek to deduct their attorney's fee and costs from defending the prior Section 107 claim from the claimant's "future workers' compensation benefits" at issue in the present claim. The administrative law judge in the present round of litigation has concluded that the respondents' request for an attorney's fee is barred by the doctrines of waiver and res judicata. The administrative law judge also concluded that a respondent is not permitted by Section 107 to deduct an attorney's fee from future medical benefits, only from future indemnity benefits. For the reasons discussed below, I believe that we are constrained to reverse the administrative law judge on these findings.
As regards the administrative law judge's determination that the respondents were required to assert their statutory right to an attorney's fee in the prior round of litigation, I note that neither Section 107 nor any rule of the Commission required the respondents to reduce their statutory right to a "sum certain" in the course of the prior litigation. To the extent that the administrative law judge applied the judicial doctrine of waiver or res judicata regarding when the respondents must procedurally raise their entitlement to a statutory attorney's fee award, I note that the administrative law judge's reasoning and conclusion appear to be contrary to the Supreme Court's reasoning in Marsh McLennan of Arkansas v. Herget, 321 Ark. 180, 900 S.W.2d 195 (1995). As I understand the Court's analysis in Herget, a party seeking a statutory attorney's fee is not constrained by the principles of waiver or res judicata to obtain an attorney's fee award in the first round of litigation. I also note that the Supreme Court, subsequent to Herget, adopted by rule-making authority a new rule requiring that the prevailing party must now generally move for a statutory attorney's fee within 14 days after entry of judgment. See, Ark. Rules of Civil Procedure 54. However, since the Workers' Compensation Law, and proceedings under that law are generally not subject to the Arkansas Rules of Civil Procedure, I am constrained to find that the respondents in the present case were not subject to the requirement to move for a statutory attorney's fee within 14 days after entry of judgment as provided by Ark. R. Civil Pro. 54. Absent any applicable authority to the contrary, I believe that we are constrained by the Supreme Court's decision in Herget, to reverse the administrative law judge's finding that the doctrine of waiver or res judicata bars the respondents from asserting their right to a statutory attorney's fee in the present litigation.
For the following reasons, I am also not persuaded by the argument of the dissent and the administrative law judge that an attorney's fee under Section 107 may only be asserted against future indemnity benefits, and not against future medical benefits. First, if the Legislature had intended that an attorney's fee under Section 107 should not apply against future medical benefits, the Legislature could have indicated its intent to that effect. Instead, the Legislature stated in Section 107(b)(2) that "the attorney's fee . . . shall be deducted from future workers' compensation benefits." Absent any limiting language to the contrary, I understand the term "future workers' compensation benefits" to mean indemnity and medical benefits.
Also, I am not persuaded by the administrative law judge's conclusion and the dissent's assertion that interpreting the law to permit a deduction from future medical benefits (in addition to future indemnity benefits) necessarily places the claimant at greater risk of not obtaining future medical care. In this regard, I note that Section 107(b) provides that the respondent may elect to have the employee pay the attorney's fee and costs to the respondents or the respondent may elect to deduct the fee and costs from future benefits. Under either election, the employee is financially obligated under Section 107(b) for the same amount of attorney's fee expense, regardless of whether the employee is required to make payment directly to the respondent or whether the respondent instead deducts payment from the employee's medical expenses, thereby requiring the employee to make the payment to the medical provider for services rendered. The only difference I see is that, in one situation the employee writes a check to the respondent, but in the other situation, the employee writes a check for the same amount of money to the employee's doctor, instead of to the respondent. Consequently, I fail to see how a deduction against future medical benefits puts a non-prevailing claimant in a Section 107 claim in a financial "plight" to obtain future medical care.
___________________________ ELDON F. COFFMAN, Chairman
DISSENTING OPINION
[26] I must respectfully dissent from the majority opinion in this case. In my opinion, respondents failed to timely raise the attorneys' fee issue. Accordingly, I find that the doctrines ofres judicata and waiver barred their claim.With painful clarity, the majority opinion illustrates the compelling reasons that exist for injured workers in this state to turn a blind eye to willful discrimination by employers. First, it is virtually impossible for claimant to prevail on a retaliatory discharge claim. Second, it jeopardizes future indemnity benefits and medical care. Finally, the imposition of costs and fees at seemingly any point creates uncertainty with respect to the finality of cases.
Integral to the majority's decision is a finding that § 11-9-107 permits respondents to receive a credit against future medical benefits. This interpretation of the law is both incorrect and punitive. Moreover, it is violative of a stated purpose of Act 796: the payment of reasonable and necessary medical expenses. In my opinion, the phrase "workers' compensation benefits" does not include medical benefits. The majority reaches a contrary conclusion, reasoning that:
Ark. Code Ann. § 11-9-102 (F) entitled Benefits identifies medical benefits as benefits pursuant to this chapter. Consequently, a strict interpretation of the Act (and even a liberal interpretation) would not exclude medical benefits from `future workers' compensation benefits' as identified in Ark. Code Ann. § 11-9-107 from which respondents may claim a credit. (Emphasis original).
The reasoning employed by the majority is flawed for it ignores the distinction between weekly benefits and medical services and supplies. See, Brooks v. Arkansas Best Freight, 247 Ark. 61, 444 S.W.2d 246 (1969). Since Ark. Code Ann. § 11-9-107 fails to define the term "future compensation benefits" the majority simply plucks a definition out of the Act which appears to be consistent with their decision.
Finally, by cavalierly dismissing the plight of injured workers that have no means to obtain health care if respondents elect a credit against future medical benefits, the majority adds insult to injury:
Conceivably, as the Administrative Law Judge noted, a claimant may be unable to provide for the medical benefits sought if a credit is claimed against medical benefits, however, this consequence must be considered by a claimant prior to asserting a retaliatory discharge claim which cannot be proven.
Based on the foregoing, I respectfully dissent.
_____________________________ PAT WEST HUMPHREY, Commissioner